El Salvador - Country Commercial Guide
Trade Financing

It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking. 

Last published date: 2020-09-30

Methods of Payment

The U.S. Commercial Service discourages sending shipments without agreeing to payment terms in advance and receiving proper bank documents. Advance payment or an irrevocable letter of credit are recommended for initial commercial transactions until a well-established relationship based on prompt payment and contractual obligations is established with the Salvadoran counterpart. Letters of credit (LCs) are among the most secure instruments available to international traders. An LC is useful when reliable credit information about a foreign buyer is difficult to obtain, but the exporter is satisfied with the creditworthiness of the buyer’s foreign bank. An LC also protects the buyer since no payment obligation arises until the goods have been shipped or delivered as promised.

Open account transactions among established business partners are used in El Salvador. The goods are shipped and delivered before payment is due, usually in 30 to 90 days. This payment method is the most advantageous option to the Salvadoran importer in cash flow and cost terms, but it is consequently the highest risk option for the U.S. exporter. However, with the use of one or more of the appropriate trade finance techniques, such as export working capital financing, government-guaranteed export working capital programs, export credit insurance, export factoring, etc., the U.S. exporter can offer open competitive account terms while substantially mitigating the risk of nonpayment by the foreign buyer.

Factoring is offered by most banks operating in El Salvador and few private companies, such as Quedex and Inter Corp.

Local credit-rating agencies should be authorized by the financial system supervisor (SSF), four companies have been approved to manage credit and financial history in El Salvador: INFOREDTransunion El SalvadorAsociacion Protectora de Creditos, and Equifax Centro America.

Primary credit and charge cards used in El Salvador are, in priority order, VISA, MasterCard, and American Express. According to legislation, the maximum interest rate for credit cards and loans is 1.6 times the simple average effective rate established by the Central Bank.

Collection agencies are not regulated and often times run by legal professionals.  The most visible collection agency in El Salvador is Puntual S.A. de C.V.  One option for U.S companies is to work with reputable law firms that offer extra-judicial collection services.

For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide available at https://www.trade.gov/trade-finance-guide-quick-reference-us-exporters.

U.S. Banks and Local Correspondent Banks

Bank financing is readily available in El Salvador. Since the dollarization of the economy in 2001, interest rates for deposits and loans have dropped sharply, but are still several percentage points above U.S. levels.  Banks offer 30-year mortgage loans.  U.S. exports to El Salvador are usually financed by loans made by local banks to importers.  Rates for loans to finance consumer goods imports average 6% for terms of less than a year.  Intermediate goods are financed at even lower interest rates.

Banking Systems

The Financial System Supervisor (Superintendencia del Sistema Financiero, SSF), an independent regulatory agency, authorizes and supervises all financial institutions in El Salvador.  In August 2011, the Financial System Supervisor merged with the Stock Market and the Pension Supervisor in order to create a single, independent regulatory agency which is headed by a Directive Council.  The Central Bank regulates the financial system, administers international reserves, and manages the payment system and financial services, and provides services to exporters and importers (Centro de Tramites de Importaciones y Exportaciones – CIEX El Salvador).

By law, all transactions carried out in Salvadoran banks must be denominated in U.S. dollars.  Interest rates and fees are set by market conditions.  Private banks, branches of foreign banks, state-owned banks, and credit unions are authorized to collect funds from the public.  The banking industry is competitive due to the presence of foreign banks and the openness of the banking law.

Commercial banking services in El Salvador are provided by fourteen institutions: twelve private banks and two state-owned banks.  The leading private banks are:  Banco Agrícola S.A. (acquired by Bancolombia); Banco Cuscatlán (formerly Citibank de El Salvador S.A); Banco Davivienda Salvadoreño, S.A. (formerly HSBC); Scotiabank El Salvador S.A.; and Banco de América Central S.A.  Together, they account for approximately 95% of the Salvadoran banking sector.  Banco Hipotecario and Banco de Fomento Agropecuario are government-owned, with market share of about 4%.  In addition to the aforementioned, other financial institutions are authorized to capture savings from the public, including seven cooperatives and four savings and loans associations.

Foreign Exchange Controls

There are no foreign exchange controls in El Salvador.  The U.S. dollar is legal tender.

Banco Agrícola S.A.

Blvd. Constitucion No. 100 y 1ª. Calle Pte., Plaza Las Americas

San Salvador, El Salvador, C.A.

Tel: (503)2267-9500

Web Page

Banco Azul

3a. Calle Pte. No. 3952, Col. Escalón

Tel: (503) 2555-8000

San Salvador, El Salvador, C.A.

Web Page

Banco Cuscatlán de El Salvador, S.A.

Edif. Pirámide Citibank, Km. 10, Carretera a Santa Tecla

Santa Tecla, La Libertad, El Salvador, C.A.

Tel. (503) 2212-3525

Web Page

Banco Davivienda Salvadoreño, S.A.

Centro Financiero Banco Davivienda Salvadoreño

Avenida Olímpica No. 3550 Apdo. Postal No.: (0673)

San Salvador, El Salvador, C.A.

Tel: (503) 2256-2000;

Web Page

Banco G&T Continental El Salvador, S.A.

Torre 2, 4o. Nivel, World Trade Centre, 89 Av. Norte, Col. Escalón,

San Salvador, El Salvador, C.A.

Tel: (503) 2209-8277, Fax (503) 2298-5261

Web Page

Citibank , N.A. Sucursal El Salvador

Alameda Manuel Enrique Aruajo y Calle Nueva No. 1

Edificio PALIC, Segunda Planta

San Salvador, El Salvador, C.A.

Tel: (503) 2211 - 2855, Fax (503)

Web Page

Banco Promérica, S.A.

Calle Chiltiupán, Centro Comercial La Gran Vía, Edif.

Banco Promérica, Ciudad Merliot, La Libertad, El Salvador, C.A.

Tel: (503) 2513-5015; Fax: (503) 2513-5105

Web Page

Scotiabank El Salvador, S.A.

25 Avenida Norte No.1230

San Salvador, El Salvador, C.A.

Apdo. Postal No. 237

Tel: (503) 2234-4806; Fax: (503) 2234-3434

Web Page

Banco de América Central, S.A.

Edif. Credomatic 55 Av. Sur y Alameda Roosevelt y Av. Olímpica

San Salvador, El Salvador, C.A.

Tel: (503) 2247-4453

Web Page

Banco Atlantida

Blvd. Constitución y 1a. Calle Pte. No.  3538, Colonia Escalón

San Salvador, El Salvador, C.A.

Tel: (503) 2206-9000

Web Page

Banco Azteca

65 Avenida Sur y Alameda Roosevelt, Edif E, Nivel 7

San Salvador, El Salvador, C.A.

Tel. (503) 2514-4504

Web Page

Banco Industrial, S.A.

Avenida Magnolias, Boulevard del Hipódromo, No. 144. Colonia San Benito

San Salvador, El Salvador, C.A.

Tel. (503) 2213-1717

Banco Hipotecario de El Salvador

Sucursal Senda Florida Sur, Colonia Escalón

San Salvador, El Salvador, C.A.

Tel: (503) 2250-7101;

Web Page

Banco de Fomento Agropecuario

Km. 10 ½ Carretera a La Libertad, Santa Tecla.

La Libertad, El Salvador C.A.

Tel: (503) 2241-0801, Fax (503) 2241-0815

Web Page